Nam Lee Pressed Metal

[BlueKelah]

I think it is better to look at EPS (using a 40 - 45% pay-out ratio) as a proxy for dividends. Also, historically, the company has maintained a significant cash balance. 

Well, there are people who like to attach additional value to a company's large distributable cash reserve, and such a way to look at valuation is actually quite rational. 

Based on its $40.5m net cash reserve - equivalent to $0.168/share (based on the latest outstanding 241.294m issued shares) as at 31Mar16 - conceivably Nam Lee can just pay out a special dividend of up to $0.10/share without having any negative impact at all to its on-going business operation and the working capital required to support it. What would Mr Market's reaction be when this happens?

Let's also look at Nam Lee from another perspective : Does it make sense for the share price to stay at the $0.30 level - supported by a already high dividend yield expectation of 8.3%pa (based on a $0.025/share yearly payout) - for the long term, when its NAV/share (31Mar16 : $0.515) and per share net cash reserve continue to increase with time?

no it does not make sense if you are looking at current figures and short term projections.

However it makes some sense when you consider the headwinds facing both arms of Namlee's revenue generation. Do note shipping is pretty bad so last years mega order book may run out without much replenishment at some point (though i have posted i dun think so). Construction revenue could fall off a cliff if we do end up with recession (very likely) 

In addition, Namlee is still only a SMALL CAP that does payout once a year in February, thats a pretty long time to wait for most impatient investors/speculators/dividend chasers, who are basically the ones in our local market that push up the small caps.

NAV and Cash hoard are just buffer for value investors, we dont move share price much. I reckon we are the few. The many are more interested in future earnings growth or short term gain from a special dividend payout, or if some analyst write up some sexy story on the company and recommend their clients to buy.

[TUBInvesting]

http://foreverfinancialfreedom.blogspot....ughts.html
Just sharing what I read here. This blogger went for the AGM and his thoughts recorded.

Hope it helps.

[Jack EL]

The share price movement is a little abnormal from the past 2 years. Price inching up with increase volume but not extensive. IMHO this kind of movement normally evolve into a privatization or takeover. Hopefully I am right... even if I am wrong, I will still be rewarded with good dividend yield.

[gzbkel]

The share price movement is a little abnormal from the past 2 years. Price inching up with increase volume but not extensive. IMHO this kind of movement normally evolve into a privatization or takeover. Hopefully I am right... even if I am wrong, I will still be rewarded with good dividend yield.

If that's the reason, there should be disclosures on the trades of significant shareholders. A check on SGX reveals nothing for the past 2 years.

[Jack EL]

The share price movement is a little abnormal from the past 2 years. Price inching up with increase volume but not extensive. IMHO this kind of movement normally evolve into a privatization or takeover. Hopefully I am right... even if I am wrong, I will still be rewarded with good dividend yield.

If that's the reason, there should be disclosures on the trades of significant shareholders. A check on SGX reveals nothing for the past 2 years.

Sorry, I meant the price movement is a little abnormal recently as compare to the last 2 years. And because the volume is not huge to be above 5%, disclosure is not necessary unless it is from existing substantial shareholder. So I suspect it could be external party. Just my 2 cents.

[dydx]

Price inching up with increase volume but not extensive. IMHO this kind of movement normally evolve into a privatization or takeover. Hopefully I am right... even if I am wrong, I will still be rewarded with good dividend yield.

I hope your prediction comes true soon!

But at the last done share price of $0.32, and assuming Nam Lee again declares by end-Nov16 a total dividends payout of $0.025/share when the FY16 (ending 30Sep16) year-end result is released, shareholders would get an above-average return and dividend yield of 7.8%pa. Even when compared with the geared-up REITs, such a return is highly respectable, and probably safer too!

If Nam Lee decides to increase the total regular dividends payout further - to say $0.03/share, or more - or declares a special one-off 'jumbo' dividend from its large cash reserve, it will be even better, and I am sure Mr Market will welcome it with enthusiasm.

[BlueKelah]

IMHO its the mega 19000+ primeline unit order from Maersk that Carrier Transicold got in OCT 2015 lah. The other shipping firms are likely to convert to the new energy saving containers as well soon.

Can fill up a couple of the new Maersk Triple E ships that can carry 18000 TEU each. 

That's a lot of containers to make. I wonder how many per month namlee can make. Perhaps someone can email Namlee to find out?? if they can make 1000 aluminium frames a month it will take them 1 and half years just to fill the order. LOL maybe they might need to expand the malaysia factory or run it 24/7.

Some pictures of the Primeline and the new Naturaline units in carrier's singapore factory found on google. Those containers are massive!!

http://www.gettyimages.com/detail/news-photo/an-employee-walks-past-a-naturaline-container-refrigeration-news-photo/168640795


however trade receivables overall is down this quarter from 39.4m (9/2015 last year) -> 23.2m this quarter so maybe namlee has completed its share of that order or maybe construction side is really getting impacted by slowdown locally.

[dydx]

The facts related to Nam Lee's on-going business supplying aluminium frames for container refrigeration units to Carrier Transicold :

1) Carrier Transicold (a unit of U.S. Carrier/United Technologies Corp) is probably the world's leader and largest supplier of marine container refrigeration units - a key system component in reefer containers - to container manufacturers now mostly based in PRC.
2) Based on available info, Carrier Transicold's main assembly plant for marine container refrigeration units is located at 251 Jalan Ahmad Ibrahim, SG 629146.
3) Based on available info, Nam Lee has remained the sole-source supplier of aluminium frames to Carrier Transicold for many years. The business relationship is cordial, long-term, strategic in nature.
4) Reefer containers are standard transport equipment for food stuff or anything that requires refrigeration or temperature control during transportation.
5) The sea-borne and international trade of food stuff is ever increasing. E.g. Imagine the amount of Del Monte bananas/pineapples - just 2 fruit items - being consumed worldwide every year which are fully dependent on reefer containers for their distribution globally.
6) Shipping companies need to replace and enlarge their reefer containers fleets regularly, and when they do so, the aluminium frames housing the refrigeration units are not re-cycled.

[sgmystique]

Seems like some investors have finally started taking note of the steadily improving performance and the growing cash hoard at Nam Lee since the last 6 quarters. Prices increased today with a decent jump in volumes. Hope this is just the beginning of a nice rerating of this counter!

[BlueKelah]

Probably the rising aluminium price past few months is helping the share price as well as the stable business and margins from the container side.

http://www.kitcometals.com/charts/alumin...rical.html

aluminium price up 10% since start of the year.